Most bears selling for the past month or so are sitting on huge losses now. Their losses and underwater shorts are actually the fuel for the next move up.
I'm not so sure about this, clearly many panic sold it down to $7.5K after buying around $10K (mainly "new money" I'd imagine), but I don't see how you would of lost money shorting from $9.4K, $8.4 or $7.8K, unless you forgot to use a stop loss - in which case you deserve to lose all your money.
Getting your stop losses triggered = losing money.
Look at what happened to shorts (at the bottom, in red):
We can see that shorts increased by ~30% in the $7,000s and peaked at the bottom on October 24th. Then they were squeezed and short levels bottomed out on October 26th when price hit $10,500.
Also, consider all the price action in the red box. From September 24th to October 25th, the market ranged below $8,800. Considering that price is now in the $9,300s, all sellers/shorters in that range who didn't buy back lower are now sitting in loss.
We can also be fairly sure the vast majority of traders did not buy back lower. Why? Sentiment was deathly bearish in the $7,000s. Everyone expected at least $7K; most people expected $5K-$6K if not $3K. In hindsight, we can now see this was extreme bottom selling sentiment. Bears weren't buying back in the $7,000s and this is confirmed by looking at short levels.
I think instead many caught this profit, upto 25% of it.
Wishful thinking. Most traders are losing money.
The breakdown on September 24th was extremely quick. Price went from $9,400 to $8,600 in a single 15-min candle. We can tell from short levels that hardly anyone shorted the top.
We then spent a month trading below $8,800. Everyone shorting at these levels either stop lossed or got liquidated already, or they are sitting on unrealized losses right now. A small minority surely profited, but sentiment and commitment of traders strongly suggests the majority did not.
There was only a few days when you could of shorted $7.5K and got "rekt", in which case for most experienced traders they'd be risking recent profit with a stop loss, rather than fresh capital.
It's not just sub-$8,000. The entire September 24th to October 25th trading range was between $8,800 and $7,300!
Why do you seem to think most sellers in that month-long range bought back in profit? The magnitude of the squeeze (third biggest daily gain in Bitcoin history) suggests the opposite. There was incredible desperation to buy back in at loss.
It wouldn't take $14K for me to shed my bearish bias, just a higher high on a long-time timeframe. Currently, given last month/weeks close, that's been lowered to $10.5K.
Based on my experience with time and proportions, I'd say it's extremely likely we get a higher high whether we're in a bull market or not. There's a decent chance we could hit $12K and then go full bear.
Betting on full bear from here though? That's very dicey to me.
I'm honestly really glad you and so many others are still bearish. If everyone was bullish, we wouldn't go up.
Not sure most people are bearish now, from my perspective most seem bullish (hence the bearish bias).
The
fear & greed index claims a neutral market, so I think both of us are wrong to have either "natural" bias.
I think "neutral" is rather accurate, and what I'd hope for.
Like xxxx123abcxxxx, I think we are in a minor Wave 2 pullback. Wave 2 is generally characterized by confusion between bull and bear because it occurs at the beginning of a trend change.
I'd say sentiment is fairly mixed. There's quite a lot of confusion over whether we're in a bear or bull market. Some point to the daily death cross and say last week's rally was a temporary short squeeze. Others believe it was a Wyckoff spring or bear trap scenario and we're now continuing the bull market from earlier this year.
I just mean I'm glad not everyone is bullish. It's a bad feeling to be long when everyone is bullish.
